Expensive laboratory tests and analyzes. From pipette drops feces with symbol of money dollars into test tube.“No problem can withstand the assault of sustained thinking.”

— Voltaire

Businesses are started with good ideas and a lot of hard work. Companies are sustained by applying that same hard work to the challenges and problems they face along the way.  The Internal Revenue Code benefits businesses for dedicating funds to the pursuit of new and improved business components. Section 41 of the Internal Revenue Code provides a tax credit of 20 percent of a taxpayer’s Qualified Research Expenses (QREs) over a base amount related to previous research expenses.  Essentially, it rewards taxpayers for increasing the amount of money they spend on research and development to improve of develop new business components that will benefit the economy and their customers. However, as with any tax benefit, there are strings attached.  In order to qualify, taxpayers must meet a four part test and certain identified expenses don’t count. Also, the IRS has scrutinized these credit claims regularly during audit and, if necessary, forced taxpayers into court to defend their claims. Preparation and documentation is key to surviving IRS scrutiny and, if necessary, prevailing in any subsequent litigation. Continue Reading The Tax Benefits of Research and Development Expenses (IRC Section 41)

Man showing Find the right people tittle on t-shirt. Human resources, partnership, choosing partner concept.Understanding the IRS and the tax laws is very difficult and confusing.  When a taxpayer has a tax controversy matter with the IRS, selecting a tax attorney may be just as confusing and complicated.  Not all attorneys are created equal when it comes to the tax laws and representing clients before the IRS.  Dealing with the IRS can be risky and confusing for someone, including an attorney, if that person is not familiar with IRS procedure.  Clients seeking a tax attorney when they are having problems with the IRS must be careful to select someone who understands this unique area of the law.  Challenging the IRS requires an attorney with special expertise and experience. Continue Reading How to Select a Tax Attorney

Joshua Smeltzer was recently quoted by Law360 in an article on cryptocurrency enforcements:

“The John Doe summons is probably one of the most powerful tools the government has,” Joshua Smeltzer, counsel at Gray Reed, told Law360.

 “Every time the IRS gets information from John Doe summonses, or from audits, or from the threatening letters that they sent out previously — all of that stuff generates data,” he said. “The IRS can then use that data to decide what indicators are available to narrow the field.” Smeltzer was referring to some 10,000 letters the IRS sent to cryptocurrency users in 2019, warning them to fulfill their tax obligations.

A full copy of the article is available here.

Experimental or interviewing hr are asking psychological questions with job seekers.A new client presents a great opportunity, but there is also great risk that the relationship will not be a good fit. If the client is not a good fit it will be bad for both sides and result in hurt feelings, damaged reputation or worse.  Here are some steps for conducting successful interviews with potential clients. Continue Reading Tax Practice Pointer: Potential Client Interview

One of the most powerful tools in the Internal Revenue Service arsenal is the John Doe summons. However, as we all learned from Spider-Man, with great power comes great responsibility.

Although it ultimately approved an IRS request to serve a summons for information on the popular cryptocurrency exchange Kraken Inc., the U.S. District Court for the Northern District of California recently reminded the IRS of this principle. Statements in the court’s recent order allowing the summons provide hope for cryptocurrency investors who are worried about their private information being included in the broad net the IRS is casting in an effort to encourage tax compliance.[1]

To read the full article, as published by Law360 (subscription required), click here.

Hand holding magnifier glass to searching red human icon on wooden cube block among black people icon. Human development concept.Clients come from many sources.  Most of our practices deal with clients who are having problems with the IRS.  These problems can range from a simple audit to serious criminal problems.  The first two things that come to mind are 1) who do we want for our clients and 2) how do we select clients who will follow our advice? Continue Reading Tax Practice Pointer: Selecting the Right Client

Hour glass on calendar concept for time slipping away for important appointment date, schedule and deadlineThe multiple rounds of stimulus checks as part of the COVID-19 relief legislation may have people believing that mail from the IRS is not always bad news. However, aside from isolated situations, most people still flinch at the sight of a letter from the IRS. If the IRS sends you a tax bill, the process and timing of the response is very important.  Here are some tips for how to handle an IRS notice or tax bill. Continue Reading How to Handle IRS Notices and Tax Bills

one hand pointing mean job demands or job pressure concept flat illustration Business about hard work and pressure for presentationCo-author: Tim Fandrey

A corporate client of the firm was recently sued for breach of contract and other violations. However, the company manager found himself facing a personal liability allegation for the company debts.  Why? The petition claimed that personal liability was warranted because the company failed to file a timely Texas franchise tax report.  This failure meant the company forfeited its corporate privileges from the day after the franchise tax report was due until the date when the report was filed and any associated tax liabilities were paid.  However, can this simple failure cause personal liability against the officers and directors for the debts of the corporation? Continue Reading Missing Annual Franchise Tax Reports Can Have Big Consequences

green palm trees covered with snow in unusually cold winterWhen Texas froze in February, I learned a couple of things: i) snow storms have names, and ii) people in my neighborhood aren’t great at covering plants. Those poor sago palms never had a chance.

Compared to the damages to homes and burst pipes throughout the state, clearing out the flower beds after Winter Storm Uri may be just a minor inconvenience, but there was a lot of dead foliage that needed to be replaced and removed all over Texas. Taxpayers should remember that those storm-induced landscaping expenses could qualify for a casualty loss deduction on their income tax returns. Because special tax rules apply to federally declared disaster area losses, potential deductions for property owners include the cost of removing the damaged plants, measures taken to preserve the shrubbery and any replanting costs necessary to restore the property to its approximate value before the casualty. Continue Reading Deduct the Dogwoods: Tax Deductions for Winter Storm Uri Landscaping Expenses